Bankruptcy Law

Individuals guilty of the bankruptcy fraud and their accomplices are also liable to penalties in addition to the principal penalty. Under Article L. 654-5, 1° of the Commercial Code, they may be barred from exercising certain civic, civil and family rights, such as the right to vote, to stand for election, to hold judicial office or to be an expert before a court, to represent or assist a party before the courts, to give evidence in court other than to make simple declarations, and to be a guardian or curator .

Until the Ordinance of 18 December 2008  came into force, the offense of concealment of bankruptcy fraud could not be punished by the additional penalty of disqualification from managing a company, which was not provided for in the legislation . Subsequently, Article L. 654-6 of the Commercial Code, as amended by the ordinance, allowed the criminal court to impose, as an additional penalty, a measure of personal bankruptcy fraud or prohibition from managing a business on a person guilty of the offence of bankruptcy fraud, unless a civil or commercial court had already imposed such a measure in a final decision relating to the same facts . This text was repealed by a decision of the Constitutional Council on the grounds that it created a breach of equality between those subject to the law, depending on whether the criminal decision was taken before or after the civil decision .

Nevertheless, the insolvency procedure court may, further to a conviction for bankruptcy fraud, impose an additional penalty of disqualification from holding a public office or the professional or social activity in the exercise or in connection with the exercise of which the offense was committed, prohibition from exercising a commercial or industrial profession, or from directing, receiving, managing or controlling in any capacity whatsoever, directly or indirectly, for one's own account or for the account of another, a commercial or industrial enterprise or a commercial company , without time-limit . These disqualifications may be imposed cumulatively. A person found guilty of the offense of bankruptcy fraud by keeping manifestly incomplete or irregular accounts may be subject to an additional five-year management ban . However, a manager found guilty of bankruptcy fraud cannot be banned from managing any business or company, even though Article L. 654-5 of the Commercial Code limits such a ban to commercial or industrial businesses and trading companies .

The court may order the exclusion from public procurement contracts for a maximum of five years , or prohibit, for the same period, the issuing of cheques other than those enabling the drawer to withdraw funds from the drawee, or those which are certified . In addition, the court may order the posting or release of the ruling . In this case, Article 131-35 of the Penal Code stipulates that the costs of posting or release recovered from the accused may not exceed the maximum fine incurred. The court may order the posting or release of all or part of the decision, or of a press release informing the public of the reasons for and content of the decision. Where appropriate, the court may determine which extracts of the decision and the terms of the press release are to be displayed or released. The posting or release of the decision or press release may only include the identity of the victim with his or her consent or that of his or her legal representative or assigns.

Ordinance 2008-1345 of 18 December 2008 concerning the reform of the law governing companies in difficulty.

Cass. crim., 5 March 2014, LawLex202100002022JBJ (LJ).

Cass. crim., 3 February 2016, LawLex202100001888JBJ (LJ).

Cons. Constit., 29 September 2016, LawLex202100002878JBJ; Cass. crim., 22 November 2017, LawLex202100001895JBJ (LJ); 24 October 2018, LawLex202100001869JBJ (LJ); 21 March 2018, LawLex202200000408JBJ (LJ); 16 October 2019, LawLex202100001885JBJ (LJ).

Cass. crim., 25 February 2004, LawLex202100002040JBJ (LJ).

Cass. crim., 19 October 2011, LawLex202100002042JBJ (LJ).

Cass. crim., 2 June 2021, LawLex202200001615JBJ (LJ).

1039. Additional penalties